Comcast Corp., the nation's biggest cable company, said yesterday it plans to roll out phone service over the Internet to all 21.5 million of its customers within the next year and a half, bringing the online technology into the mainstream.
The move could be the most significant challenge yet to traditional local phone companies such as Verizon Communications Inc., analysts said. Comcast has a well-established brand, and it can use its cable TV network to deliver telephone service, bypassing the established phone network altogether.
Comcast Corp. chief executive Brian L. Roberts announces the top U.S. cable company's leap into Internet calling.
(Paul Connors -- AP)
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The company said it hopes to sign up 8 million customers for the $39.95-a-month phone service within five years by luring away customers from the regional phone companies. Cable and phone companies already compete directly in offering high-speed Internet service for computer users.
"We go up against the telephone companies every day," said Dave Watson, executive vice president of operations for Philadelphia-based Comcast. "We recognize that the voice business is another opportunity to do that."
Comcast plans to offer the service to as many as half of the 40 million homes within reach of its cable system by the end of this year and the remainder by the middle of next year, Watson said. It will be available this year to more than half of the Washington area homes served by Comcast, he said. The company is the area's largest cable provider, with 1 million customers.
Internet phone services send voice calls over computer networks as packets of data in the same way that e-mail and Web pages are transmitted. Early versions were plagued by poor sound quality and other glitches, and the technology was offered mostly by lesser-known start-up companies.
But the technology has improved, and the service is being offered by major cable companies and even traditional phone carriers such as Verizon. The latest Internet phone systems look and feel like traditional phone service, while online technology gives customers added control. They can go on the Web to program services such as call forwarding, caller identification and voicemail delivered over a Web site.
At $39.95 a month on top of the price of cable service, Comcast's package of local and long-distance calling is more expensive than some rival services.
Verizon offers a bundle of unlimited local and long-distance service over traditional phone lines for between $50 and $60 a month, depending on location, but it also offers Internet phone calling for $29.99, if purchased with its high-speed Internet service.
"We've been a proponent of bundling. We still have to see proof that cable companies can do it," said Eric Rabe, a spokesman for Verizon. "What makes [the bundle] appealing is offering it at a lower price. Comcast isn't doing that."
